How to avoid paying LMI

Lender’s mortgage insurance (LMI) is required in many instances when a loan is worth more than 80 per cent of a property’s purchase price, as well as in some other circumstances. In very basic terms, when a lender considers a loan to carry a high risk, LMI is likely payable. Here’s how you can avoid paying the costly premium.

Save for a higher deposit

The purpose of LMI is to protect lenders in case the borrower fails to make repayments and, when the loan-to-valuation ratio (LVR) exceeds 80 per cent, so the loan amount is more than 80 per cent of the value of the property being mortgaged, the risk of a lender not recouping their costs should the borrower default is increased. A higher deposit means a smaller loan amount, so will decrease the LVR and the perceived risk, and may be the key to avoiding paying LMI.

Get a guarantor

If you don’t have the financial capacity to meet a 20 per cent deposit but still want to avoid LMI, you do have the option of getting a guarantor on your loan. Normally a close relative, such as a parent, guarantors can use the equity in their property to help you secure yours. In some instances, having a guarantor on your loan may mean that you won’t need a deposit at all.

Take advantage of professional benefits

Although special offers based on the borrower’s profession are not limited to medical professionals, doctors are the big winners when it comes to waived LMI fees. Due to the perceived stability and high income, some lenders consider professionals earning a minimum of $150,000 a year as ‘low risk’ borrowers and therefore offer them special loan benefits.

A little insider knowledge from Nick Kirlew, an MFAA accredited mortage broker will go a long way in helping you find a loan that won’t require you to fork out for LMI.

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Thinking of Refinancing?

Maybe you didn’t know this but a large majority of home owners in Darwin who have a mortgage are needlessly paying more interest to their bank than they need to be …

How do I know?

Well, every day, I help time poor people refinance their loan to a better rate.
The best part about this is I get to hear about how they have used the money they have saved
They all get really excited when they find out they can re channel the savings into things like

A new kitchen fit out
Remodeling their bathroom
Adding an extra room to the house
Some have replaced their car and a few …
They are posting pictures form their overseas holidays.

And some did this, without spending a cent more out of their weekly budget. They just used that surplus that they saved through refinancing and reapportioned it to a better-quality lifestyle.

Isn’t that amazing?

If the thought that you are paying too much interest on your mortgage bothers you, then I have created a 5-point check list that tells you how you could turn this around in your favour.

It is easy and fast to implement each step.
To receive your copy of the guide click the Learn More button, put in your details and I will email the guide to you straight away.
I’ve seen how following the checklist has put a big smile on my clients faces and I would love to see it do the same for you!

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